TOURISM SURVIVAL KIT

The global coronavirus pandemic has hit the tourism sector all over the world more than ever. Most countries with a developed recreational sector do not plan to open borders for foreigners until the end of the summer season. According to the UN World Tourism Organization (UNWTO), 2020 can be considered largely lost for the industry, and in the mildest scenario, the number of trips will decrease by 58% by the end of the year. However, as quarantine restrictions are relaxed, an alternative for foreign tourism may be the development of domestic tourism. This option seems optimal for Azerbaijan too.

Lost season

According to the UNWTO, since the start of the COVID-19 pandemic, about 96% of the countries have imposed certain restrictions on tourist trips to curb the spread of the disease. Unlike previous years, when there was a tendency to simplify entry for foreign tourists to make countries more open to them, 209 countries have imposed travel restrictions. Forty-four countries completely closed the borders for citizens from the countries with the most difficult epidemiological situations, including China, Italy, South Korea, Iran, etc. Since the pandemic, all countries in Africa, Asia, the Pacific, and the Middle East have imposed travel restrictions. In Europe, the share of countries with closed borders reaches 93%, in the Americas - 92%.

The consequence of quarantine restrictions for the global recreational sector was a 22% decrease in the number of foreign tourists during 1Q2020. More than half of this number was observed in March, when many countries have tightened entry rules and completely suspended international flights. This caused a loss of 67 million international arrivals and about $80 billion in tourism revenue in the first quarter only.

UNWTO experts predict that according to the results of the year, losses can be many times higher given the three scenarios for the restoration of international tourism this year. The mildest option allows a drop in international tourist arrivals to 58%, if travel restrictions are removed in early July. With the relaxation of quarantine restrictions in September, the scale of reduction will be 70%, but if the ban continues until the end of the year, the total number of trips for 2020 will fall by 78%, or 1.1 billion international tourist arrivals. In accordance with the worst-case scenario, revenues from foreign tourism will be reduced by $1.2 trillion. The industry may face the loss of 100-120 million jobs, which is most dangerous for states where tourism is the leading sector of the economy.

“The authorities opted for health care by imposing travel restrictions. However, the suspension of tourism entails a reduction in the number of jobs with the sustainable economic growth achieved so far plummeting down. Therefore, we urge governments to constantly review travel restrictions, to cancel or ease them when travel becomes safe,” UNWTO Secretary General Zurab Pololikashvili said.

Apparently, these calls have not yet found support in most countries of the world that are awaiting further developments related to the spread of the COVID-19. According to the latest data, the leading hubs of world tourism including Italy, Spain, France, Germany, and a significant part of European countries do not plan to open borders for foreign tourists in the summer season, although in some countries they allow relief for internal recreation of their own citizens and residents of neighboring regions. In particular, a number of European states (Austria, Greece, Cyprus, Portugal, etc.) declared their preliminary readiness to receive foreign guests from the beginning of July, however, it is mainly about receiving tourists from “European countries successfully fighting against the coronavirus”. This was possible due to the adoption of the pan-European protocol on "health and safety" to be developed in the EU soon. Moreover, it is still unknown whether European countries agree on the introduction of such a control mechanism by the beginning of the holiday season.

In the meantime, the EU is going to provide 375 billion euros to restore its tourism industry after the coronavirus pandemic, which indirectly indicates that the summer season is most likely to be considered lost for travel agencies.

Experts from North and South America and Southeast Asia are equally pessimistic, with the majority of them expecting the resumption of mass tourism only by the end of 2020 or the beginning of 2021.

Among the regions of the world, experts are most optimistic about the prospects for recovery in the Middle East and North Africa, tentatively by the middle of summer 2020. In particular, Egypt has been resuming operation of hotels in resort areas since May 15, but at the first stage they will function exclusively for domestic tourism and subject to strict adherence to all sanitary requirements and WHO recommendations.

Turkey plans to go even further and gradually open the entrance to the country for foreign tourists,  at the same time resuming international flights scheduled for June 12. But given the number of infected Turkish citizens in the first decade of May (more than 130,000), only hotels with special certificates certifying the absence of coronavirus will open with a number of restrictions for tourists. For example, during check in, the hotel staff will measure the temperature of the guests and give them masks. Also, the number of people in the dining rooms will be limited, the buffet will no longer be available, coffee machines and other vending machines with drinks will temporarily disappear. Concerts and mass public events in the recreation areas will also be closed, the number of sun loungers on the beaches will be reduced by half, and spa centers and fitness rooms will be completely closed this season. Today it is difficult to make assumptions regarding the attractiveness of a vacation with so many limitations. Given the jumps in the dynamics of the contagion, Turkish experts believe that the occupancy rate in hotels will not exceed 60% at best.

In the post-Soviet space, only Georgia announced its readiness to open the borders for international tourists starting from July 1.

The scale of losses

How is the situation in the tourism sector of Azerbaijan developing today, and what measures are taken to minimize damage from a decline unprecedented since independence? Most experts completely agree that given the coronavirus pandemic, there is no reason to hope for any noticeable increase in inbound tourism this year. Even with the forecasts of a decrease in the incidence rate in Azerbaijan during the summer period, it is hardly possible to quickly restore international passenger traffic with post-Soviet countries, the Middle East, Indochina, Europe, considering the epidemiological situation and restrictions on transport in these regions.

This is an extremely important factor, as the tourist boom observed in Azerbaijan over the past four years has been built on massive budget tourism, simplification of visa procedures and the attraction of low-cost airlines. Thanks to this strategy, 3.17 million foreign tourists visited Azerbaijan in 2019, which is 11.3% higher than in the previous year. Moreover, the expenditures of foreign tourists in Azerbaijan only through bank cards reached $1.748 billion. At the same time, calculations show that, given the prevailing cash payment for services by tourists from Russia and other post-Soviet countries, the total income from the incoming segment exceeded $2 billion last year. For comparison, in 2019, the total monetary volume of Azerbaijani non-oil exports reached $1.9 billion. Thus, until recently, tourism and the related services sector ranked second after the oil and gas sector as the source of foreign currency in Azerbaijan.

The above statistics illustrate the extent of losses in the domestic recreational sector, as most experts believe that the foreign tourists in Azerbaijan should be expected only by the end of this year. According to the head of the tourism industry and destination development department of the Tourism Bureau of Azerbaijan, Ilkin Javadov, a number of European countries have already announced the closure of borders for foreign tourists in the summer season and the restriction only to domestic tourism. Guests from the neighbouring countries of Russia, Iran, Georgia, Turkey, Kazakhstan and Ukraine can only be expected by the end of the year. Therefore, Mr. Javadov believes that the main priority is to build activities based on domestic tourism.

President of Azerbaijan Ilham Aliyev also said about the need to reorient the recreational sphere to domestic resources in his recent interview with the TASS, Russian news agency: “The tourism sector has been very promising for the last four years. We observed the growth of tourists from 10% to 24%. A modern tourism infrastructure has been created in the country. But, of course, the pandemic hit this sector very hard. Today we are thinking about stimulating domestic tourism, especially when millions of Azerbaijani citizens leave the country during the year, including on vacation. Since the borders are close, they will probably be reoriented to domestic tourism this summer,” President said.

Back in February, the State Tourism Agency (DTA), which is responsible for the campaign to develop the domestic tourism in Azerbaijan, has already started relevant works. In particular, on the initiative of DTA and the Azerbaijan Tourism Bureau (ATB), a special SAHMAN program was developed to ensure effective compliance with sanitary and hygienic rules, and to increase competitiveness in the tourism industry. Implementation of the SAHMAN rules will make it possible to promote the domestic tourism more actively, to improve the status of Azerbaijan as a safe tourist destination in the international arena and to increase the country’s competitiveness in the post-pandemic period. According to the chairman of DTA, Fuad Naghiyev, at the first stage, the program is implemented in hotels and hotel-type enterprises, catering facilities (cafes and restaurants) and in vehicles serving tourists. The state agency is starting to conduct trainings for industry representatives who have joined the SAHMAN program, and intends to support them in such areas as support, marketing and branding, to reimburse part of the costs for the sanitary and hygienic measures required by the program.

Recovery program

ATB also initiated a four-stage program for the restoration of the tourism industry. The priority is to support the development of local tourism. According to ATB General Director, Florian Zengstschmidt, the agency is planning to increase the priority of nature tours, as well as destinations that do not involve a significant concentration of tourists in the near future. At the initial stage, small accommodation facilities such as cottages, boutique hotels and daily rentals will be in demand.

ATB also supports the implementation of a number of projects such as the Adventures Nearby (“Məcarə yaxındadır!”), which was developed to promote domestic tourism and popularize the country's tourism opportunities among the local population. The project was developed as a platform combining domestic travel packages for Azerbaijani citizens and allows various companies to place their travel packages on the website macerayaxindadir.az. The website allows tourists to plan every step in detail: from buying a ticket, booking a hotel to comparing different tour packages, as well as developing their own package, making own requirements and preferences.

“In the summer, trips to popular foreign tourist destinations will have to be cancelled in most cases, which means that the demand for domestic tourism will increase. Currently, the process of preparing for the tourism season should be accelerated so that all travel companies join forces to attract citizens of the republic to relax at home, developing new products and services,” Muzaffar Aghakerimov, Advisor to the Chairman of the Azerbaijan Tourism Association (ATA), said. He considers it necessary to conduct monitoring in hotels and recreation centres, as well as assess the level of prices for services and their relevance to the budget of local tourists.

The first steps in this direction have already been taken; recently, on the initiative of AzTA and a number of other relevant associations and travel companies, a Memorandum of Partnership Association was adopted. It was decided that with the support of most travel agencies, a think tank will be organized in the near future, a clear mechanism of activity will be developed, and joint work will begin to create effective projects to support domestic tourism this season.

Obviously, this year it is rather difficult to make forecasts about the potential of domestic tourism to partially compensate for the losses of the inbound tourism sector, taking into account the economic downturn and the declining demand of local citizens. At the same time, most 5-4-star hotels and luxury leisure areas are unlikely to be able to reorient prices and the level of service based on the budget segment. And this promises a loss of income and a certain reduction in staff in a number of tourist sites.

Nevertheless, according to experts, domestic tourism can still provide temporary support to the most part of recreational facilities because even with the growing popularity of holidays in Georgia, Turkey, and European countries in recent years, revenues from domestic tourism have been at the level of $500 million annually. Moreover, the real numbers may be higher, since a significant portion of citizens rented housing in the private sector, which made statistical accounting difficult. Given the external quarantine restrictions, we can expect that a considerable part of the demand this summer will be redirected to the products of domestic tourism.